When the price of a normal good decreases,
a. both the income and substitution effects encourage the consumer to purchase more of the good.
b. both the income and substitution effects encourage the consumer to purchase less of the good.
c. the income effect encourages the consumer to purchase more of the good, and the substitution effect encourages the consumer to purchase less of the good.
d. the income effect encourages the consumer to purchase less of the good, and the substitution effect encourages the consumer to purchase more of the good.
a
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Opportunity cost is illustrated on the production possibilities curve by a
A) bowed-out shape of the curve. B) shift to the right of the curve. C) shift to the left of the curve. D) movement along the curve.
Oligopolist A cuts price in an attempt to enlarge his share of the market. His competitors fail to retaliate with price cuts. In this case, in Figure 13-3, oligopolist A will move from point A to which point?
A. B B. C C. D D. E